Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698941080778.pdf (Uganda)
I 1 Kro ..i b o 2 3 tlA\ IJ1J RECL I vt: 76, Ki \7 3c I \ \J FgL^i E -a\lDg PARLH.DIENT OF THE REPUBLIC OF UGAI{DA 4* REPORT OT THE JOTNT COMMITTEE OF THE COMMITTEES Olr DEFEITCE AND INTERITAL AFFAIRS; AND PHYSICAL IIT.RASTRUCTURE ON IIITVESTIGATIONS ON THE IMPLEMENTATION OF THE INTELLIGENT TRANSPORT MONITORING SYSTEM BY M/S JOINT STOCK COMPAITT GLOBAL SECURITY -d + t-- w OFFTCE OF THE CLERK TO PARLIAIUEN?
-2 PARLIA"MET{TARY BUILDINGS I(AMPALI\.UGANDA MAY, n L il\uF' 4 r I tu 1 .Fh gl?g- Table ofContente [rsT or .acRorvzMs...... ilrurRo 2 BACKGROANI' 3 TERMSOTRETERTTCE 4 METHODOI.OG 5 rflrs PRo.tEcT IMPI&,ME I{TATIO N OVE-RWEW .................... ' 7 2 2 3 4 t ffi 5.1 Specldc obJectlvea of ITMS; 5.2 Stepr teken by thc govcrnacat 6 PROGRESS Of fIE PRO,.INT;....'', 7 THD Flttl,tlCtlt MOD8L.......... 8 flMllrcq OASERyATTOI\IS ANL RrcOMM8NDATrOrU|S...........................7 4 4 8.1 Tor 1: Ao ectablhh whcthet lmplcraeatiag the ITMS protects aad prelerirues people'r rtght to Hvacy.
.......... 4.2 Tor 2; To catabllrh whethcr vdue for moncy wlll bc achievcd during the implementatlon of the ITMS proJcct.

8 2 1 The finanaal model for the intelligen tronsport morutonng system.
9 11 8.3 Tor 3; To crtabllch whethet a dcnonstration of the effcctftrcnerc of thc project by lnrtalling thc ITMS on gouerlrmcnt vehlclcr, nototcyclct, aad paerengcr renrice vchlcler, lncludhg tards, bcforc roll out wac dotrc....13 8.4 Tor 4; To cstabllsh whethcr Government would mcet all costs requlred for lnatalllag thc ITMS ln all vchicler.

1S 8.4.1 The proposed.

Fees to be clarged on thc neu digital registratan plate.

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15 8.4.2 The proposed fines.. t7 8.4.3 Insrranes fees.
18 8.5 Tor 5; To cerrlr out an eihau.tlv€ lnvcrtigatioa iato thc cxistcncc and oPeratloan of MS/Jolnt Stock Company Global Security.................................... 19 .1 8.5.I Whether Ms Jomt S/.ock Compang Global Sec.l.ntg ensts................. ... .

8.5.2 Whether M/ s Jotnt Stock Campang Glabal Secl,.mtg rc undergorng tunkruptcg proedures.
8.6 Alry mattcrs lncldcatal thcreto 22 8.6.1 Whether Gouemment complQd utth all tle Ptoc./,remen, processes ennsaged tn the Proa)rement of h)bhc Assets and Dtsposal of Prtblrc Assets Ad and the Pub(c Priuate Pattnershtp Act; 22 8.6.2 Unstable netutork sigtal auers .

coflcLUsroil 4t 25 24 G- Llst of Tables.
Table l: Chronolory of ITMS prolect events Table 2: Proposed charges of tracker and number plates m the approved ITMS prolect financral model Table 3: Proposed fines rn the tTMs project Financial Model 4 15 t7 fu-427 N s:\ c*2 ( .V 1 ';> M ,t, ew )yt & L{ ( $,4''t-\1 @ ( LIST OF ACROITYMS CAPEX Capital Expenditure s( 5- GoU rso ITMS JSC KCCA MoWT NEC NITA PMT PPP ROI UNRA UPDF URA UTL Government of Uganda Internal Security Organisation lntelligent Transport Monltorlng System Joint Stock Company Kampala Capital City Authority Ministry of Works and Transport National Enterprise Corporation National Information Technologr Authority Project Management Team Public Pnvate Partnership Return on Investment Uganda Revenue Authority Uganda People's Defence Forces Uganda Revenue Authority Uganda Telecom Limited ( ,{ L'v : ( t 1 INTRODUCTION @ 9 e Dunng the Plenary Sitting of 30ft November 2021, Hon.
Achieng Sarah Opendi, Woman MP, Tororo District, moved a Motion for a resolution of Parliament to urge the government to examine the implementation of the Agreement for the implementation of the Intelligent Transport Monitorrng System with M/S Joint Stock Company Glob uritlr to address pubtl"(w; concerns.
{N{ She stated that on 23.d July 2021, the government entered into an agreement under the Public Private Partnership arrangement with the M/S Joint Stock Company Global Security for the implementation of the Intelligent Transport Monitorrng System aimed at enhancrng crime management through detection, identifrcation and recognition of all vehicles and motorcycles operating in the countqr, other benelits.
She further stated that the government wo install the Intelligent Transport Monitoring System (ITMS) in all public and private vehicles and motorcycles.

She was concerned that installing the monitoring and tracking system would create an additional cost, which the vehicles' owners would rncur in addition to the already high cost of acqurring vehicles.
Additionally, she indrcated that intrusion into people's right to Privacy was like 4A") 4 In her prayers, she urged the government to judiciously examine the implementation of the Intelligent Monitoring System to ensure protection, 5M preservation of people process.

freedom and value for money in this whole a The Rt.

Hon.

Speaker referred the Motion to a joint Committee compn the Committees on Defence and Internal Affairs and Infras er scrutiny and report back to Parliament.
r ical o w q" 2 2 BACKGROUND Following the gruesome killings committed by criminals around the country moving in unrdentified vehicles and motorcycles in 2018, H.E., the President of the Repubhc of Uganda addressed Parhament and presented ten measures that the government was going to undertake to fight the escalating crime among which included smart number plates and a Smart Tracking System for motor vehicles and motorcycles countrywide.

He requested for Parliament's support in these endeavors.
Subsequently, GoU identifred the ITMS project to develop the implementation of a Smart Tracking System rn Uganda that wilt improve cTimg nanagement, security, traffic manage-.

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.on ffi [11..* "t $)12' aA#Z The ITMS rs an intelligent safe city system based on software that stores information about vehicles and owners, analyses traffic flow through special equipment and checks vehicles' legi The project's overall goal is to improve secunty and reduce cr committed against innocent Ugandans by criminals, who have a habit of shooting people and getting away, mainly on motorrycles.
Subsequently, the Government of Uganda, represented by the Ministry Security and the Mrnistry of Works and Transport, entered an Agreement with a Russian company Messrs Joint Stock Company Global Security, on 23.d July 2021 to set up an Intelligen t Transport Monito System (rTMS).

The Presrdency is coordinatlng the pro1ect specrfically under the docket for security, working together with relevant Security Agencies, and the # reparatory arrangements to implement the directive oflice commenced above.
TERMS OF REFERENCE The Joint Committee consrdered the petltion under the Ilo Term fe -{ (-.-- lz a a 2 q^ g fu@6 r. To establish whether implementrng the ITMS protects and preserves people's rrght to Privacy u.

To establish whether value for money will be achieved dunng the rmplementation of the ITMS project.

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To estabhsh whether a demonstration of the effectrveness of the project by instalLng the ITMS on govefirment vehrcles, motorcycles, a-rld passenger servrce vehrcles, including taxis, before roll out was done.

iv To estabhsh whether Government would meet all costs required for installing the ITMS in all vehrcles.

v. To car4r out an exhaustive investigatron rnto the existence and operations of MS/Jomt Stock Company Global Any matters incrdental thereto.

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{F 4 MBTHODOLOGY The Committee; *@5) a) Held meetings with the following; I ll The Minister and officials of the Ministry for Securrgr The Minister and officials from the Ministry of Transpo rt an Works 111 Hon.

Sarah Opendi, oman MP Tororo Dis ct, the mover lv.

the motion.

The ITMS Project Management Team (PMT) composed nominees from the President's office, Ministries of Finan Security, Works, NITA Uganda, UTL, Uganda Police, F, NEC, ISO and Attorney General's office.
Representatrves of MS/Joint Stock Company Global rity b) ewed the following documents; I 1t lll lV.

24 The Constitution of the Republic of Uganda 1995 The Pubhc Finance Management Act 2015 (, zu The Public-Private Partnerships Act 2015 Memorandum Of Understanding between the Gove Ugan da and Joint Stock Company Global Securr E w 3 *-sfu I Agreement between the govemment of Uganda and Jornt Stock Company Global Security vl.

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The Technical specifications report by PMT The Financial Model by PMT Correspondence with the Attomey General Articles of Association of Ms Joint Stock Security and Ms Virrus Global Security Company -W Company Glo ctL :2 5 ITMS PROJECT IMPLEMENTA 5.1 Specifrc objectives of ITMS; TIOTT OI'ERI/IEU' The pecific objectives of the project are:- t Crime management through detection, tracking, identification and recognrtion of all vehicles and motorcycles operating in the country; ii.
Provide additional beneflts like improved revenue collection (by URA), improved traffic management (by Uganda Police Force), and enhanced process of registration of vehicles/ u rcyc7 5.2 Stepc taken by the goveram€nt Considering the Security sensitivrty and the multr-sectoral approach required towards the implementation of the ITMS, Governmen undertook the following steps summarised in Table I below Table 1: Chronologg ofITMS project euents Euc!.t Drte 22"d March GoU, represented by the Hon.
Mimster for Sccunty and the 2Ol9 Attorney General, entered an MoU with M/s.
Joint Stock Company Global Secunty To undertake a feasibility yon creatmg the mMS September Completlon ofTechnical feasrbility 2Ol9 stLrdy pursuant to the MoU drB b { N&J The frnal technlcal feaslbihty re that covered the problem statement, proposed solutlons, , goals and objectives; the ufi-pt"-".,ting agencles, and the <,..-.-.- 4 a-- W)"^ \$ nl I!tla L- technical/engrneenng e,ra requirements, among others clears the In a letter, ref.
ADM 7/ 1 97 lot dated 21a July 2021, the Sohcitor w 5- 21"t July 202r Solicltor General Agreement @ July 2O2l Cabinet approval under Mrnute Extract 129 (CT 2021) s. July 23,n 2021 GoU, represented by the Offrce of the President, Minrstry of Works and Transport and M/s Joint Stock Global Security, agree to implement the ITMS Although signed in July 202r, General cleared the Agreement.

The Hon.
The Hon.

Attomey General rein this position in his letter reft AGl2O2ll376S dated 4d' May 2022 Sectron 33(31 of the PPP Act 2015 requires Cabinet approval where a Contractor has been procured directly, especnlly in conditlons where competrtion is not feasible, e.g under Secunty considerations.

Accordingly, Cabrnet approved the mplementation of the ITMS The ITMS Agreement eventually became effective on 2Ou JluJ)e 2022 upon the Partres approving the Fmancial Model in line wlth Art 4 1 of the ITMS Agreement.
The Permanent Secretary, Office of 7$ December the President, appolnts a PMT team provides that: "Immedlately u 2021 the execution of thls Agreement, Article 1 1.

1 of the ITMS Agreement ' Employer shall constitute a Project Management Team (PMT) whose mandate shall be to oversee the.
development of the kolect by Contractor and to work closely wlth the Contractor concemmg all the technical, legal and financral aspects of the Project" "k %- &urce: MoU between GoU utth M/ s. Jo Stock hmpany Global Seannty and stakeho submissrons 6 PROGRESSOTTHEPROJECT; "K" ect Management Team (PMT) has so far carried out the following: latrons for the n vehrcle registration plates.

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v The Ministry of Works and Transport, wrth the support of the consultant, prepared the User Specifications for the Motor Vehicfp Registration model to be used.

by ITMS.

Finalised the Project Implementation Schedule.

,))rV &tr Reviewed the transition plan from the existing Number Plates to the new secunty-enhanced Number Plates.

Finalised and recommended to the govemment for approval of the Financial Model of the project investm t at the cost of USD 26?,0,3,3,822.93.
i 7 THE FINAIiICIAL MODEL.

The financial model (Appendir l/ cost drivers and assumptions includeW at USD 257.034 million, funded following.

I Total investment is es wholly by private equity.

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vt The proposed infrastructure will support exi sting Police surveillance infrastructure where available.

However, new calibration will be required to synchronise the equi contractor's cost, e.9., Cameras.
The primary sources of revenue from the investment are traffrc violation fines, motor vehicle and motor cycle registratio replacement of Onboard Devices, Vehicle monitoring fees driver's license registration The key drivers of the investment costs are CAPEX 234,9O9,9 I 6.05) and O PEX (USD 22, 123,906.881.

The return on investment (RO!

rs calculated at 38.99o/o over ten years.

(usD The projected Net Profit Margin the prolect period.

Net Income Ratio ts 15.61% ov ',ffi' vii.


The revenue to OOU over the ten years rs projected at on- 24 247.O9 E'z;,a ff-*^ 6 8 FINDINGS, OBSERVATIONS AND RECOMMEI{DATIONS I € The Committee's lnqurry ehcited findings, observations and recommendations in light of the terms of reference as demonstrated below.

8.1 Tot 1: To eetablieh vhether implenenting the ITMS protect6 a Irreserecs people's rtght to Prinacy.
#< The Committee found that Privary is a fundamental human right enshrined in numerous internatronal human rights instruments and the Constitution of Uganda.

It is central to protecting human dignity and forms the basis of any democratic society.

The Committee understands that the petitioner's concerns are premised on the fact that a foreign firm wr.ll manage the ITMS architecture and, by extension, the data collected.
Because the system is inherently vulnerable to state surverllance due to the State's deploying increasingly sophisticated and coercrve means to to surveillance prevent crime, the likelihood of subj citizn disruption is imminent.

./e )-/ Whereas the petitioner's concern reflected the fear that installing the monitoring and tracking system would result in the intrusion into people's right to Privacy, the Committee found that the ITMS contract is well clothed within the Law.
a ,ffi Article 2 of the Constrtutron of the Republic of Uganda provides thus: "No person slwll be subjected to interference uith the piuacy of communication or otter that person propeftg."

's home, ca However, the right provided for in Article 27 (21 of the Constitution is eral hmitations provided for in Ar subject to gen Constitution.
3of 43 of the Constitution prouides thtts f N 7 + (1) In tfle enjogment of the riglxs and freedoms prescibed in thi.s Chapter, no person shall prepdie the fundamental or other luman rights and freedoms of others or the public interest.

(2) Public inferests under this article shall not permit- (a) Politrcal perseanton; (b) Detention utithout trial (c) Ang limitation of tle enjoyment of tle ights andfreedoms prescribed bg tfus Clnpter begond uhat is acceptable and demonstrablg justifiable in a free and.
democratic +- societg or uthat is prouided in this Constitution az,& Courts in Uganda have defined what amounts to public interests.

The case of Aboneka Michael and.

Center for Constitutiona.l Gouernance us Attomeg General HC Msc, no 367 Of 2018, described public interests as 'something in which the public as a whole has a stake'.
It further appreciated the definition of public interest in the case of R vs Bedfordshire 24L.J.G.B 84 as '...does nat mean that uthich is interesting as gratifuing anriositg or loue of infotmation or amusement; but tttat in uthich a class of thc communitg haue a pecuniary tnterest or some interes bg whichtheir ig hts or liabilities are affected."
Further, the Supreme Court, in the case of Amoti Godfreg Ngakana Vs Attorney General and others Con st. Appeal No.S of 2O11, fhe court held that while our Constitution permits limitations on the enjoyment of the rrghts guaranteed under it, those limitations are only permissible to prevent the prejudicing of the rights of others and to protect public interests, which is justrfiable rn a 'free and democratic societ/ or as provrded for bv the s QPa ame Constitution.

Obecnrationg.
Obecnrationg.

The Committee observed that; 4+- The right to Privacy is among the rights under whrch interfere, as Article 43 of the nstitutron provides.

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s$: ,g State r .to-1 I * w is not absolute, and the State is clothed with powers to interfere where necessary for the public interest within what is acceptable and demonstrably justifrable.

The gruesome krllings by hit-and- run gun-wielding motorcyclists recorded in Uganda pause a great danger to public security if undeterred.
The Data Protection and Privacy Act, 2019 under Section 7(21 (bl (ii) and (iii) altows the State to collect personal data for national security and; prevention, detection, and investigation ofan offence or breach of the Law to interfere with your Privacy.

Section 20 of the same Act obliges the data collector (ITMS) to ensure the integrity of personal data in their possession by adoptrng appropriate and reasonable measures to prevent the loss or unlawful/ unauthorised access to data collected by the system.
Article 7.

1 of the ITMS Agreement provides that'The Pafties shall ensure tttat Personal Data is alleded, pro@ssed and stored.

in d&od.ance uiththe Data Protection and PriuacE Act, 2O79.

No partg 11.

Ii.l ffi shall use ang personal data allected., processed or stored purposes other tlnn for the objed,s of this Agreement.

Therefore, the laws of the ITMS rs mindfLil of the Data pro tection and pnv 4tu Country.
Recommendation; Coranittee, therefore, rcco mcnds that; I Government chould take the inltlatlvc to about their rights to Privacy.. c na- it.

The Governmeat should sensitlse the public on the benefita of 'h/% thc ITMS systeo in crlnc Earageaent.

2 8.2 Tor 2; To eetablish rhether value tnoncy wlll be achieved during the implernentatioa of the ITMB prdect.
The Committee rs mrndful that rn the Constrtutron of the Republic of U a T 163 (3) (b) and Section 21, the Audrtor General is mandated to e-for-money audrts drng any pro.1 blic ds .l 9 5.""r.

w2Y+ W The Committee estabhshed that the total investment of the ITMS project would amount to USD 257,033,822.93, and the investor would entrrely bear tJle cost.

However, the Commrttee observes that the investor rntends to recover thrs cost through fines and fees provided in the financral model.
ffi It rs noteworthy that for such prolects to be undertalen by the govemment, comprehensrve due dfigence on the contractor should be conducted to crigcally revrew and evaluate ther capacity to minimze srgnrficant loss after the contract has been closed.

The Minister of Securrty informed the Committee that the Prolect Management Team undertook due drhgence on the Company, aIId the team gave assurances of value for money in lts due d igence report.
However, the Committee 6nds it prudent that for Parliament to pronounce rtself on the matter, the Committee should be allowed ar opportunlty to benchmark on some of the prolects already implemented by the M/s JSC Global Security to to dehver on the con assess rts capacity formoney.

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Thc Connittee recomracnds t tract andi for .iw government ensure value ffi ( i. Duriag the iaplet[cntatiorr of the ITMS project, the Auditor General regularly conducts valuc-for-rnoney audits on the projcct to establish whcther the total project costa rcported are; r Reflective of the actual coets for the o Prudently incurred folloring project, the p t lnplernentation dcrlgn, aad r Reflective of traluc for ooaey.
otr adopting thl: repott, the Conmittce be dlorrcd an portunlty to uadcrtake a beachmark/due dlllgencc oa thc alrcady lmpleneated prdectc by thc M/r JSC Global Secudty to asscla ltr capacity to valuc for rnoney.

tract for govcrnEeat to e dclivet on the I. C-L T 1 10 11. v g 8.2.1 The financial model for tle tntellqent transpott morutoing sgstem.

The Committee established that the Agreement on the Intelhgent Tra.nsport Morutoring System (ITMS) between GoU and Joint Stock Company Global Security.
under Artrcle 4, set out the conditions precedent to the Agreement's elfectiveness, among whrch was the Financial Model for the ITMS projcct.

The Commrttee's scrutmy of the Frnalcral Model revealed the following; 8.2.1.1 rhecoststruduteofthernuestment.
- r$re' fiS The Committee estabhshed that from the model, the total investment by the private investor would arnount to USD 257,033,A22.93 This will cater for lrutlal capltal investments for acquiring dlmeras, speed radars, smart regrstration plates, electronic devices, control room ald software.

The government wrll provrde the land on which the facility's headquarters will be set up.

No financial investments or guarantees will be required from GoU.
Only pohcy support and mtegration wrth exrsting secunty mfrastructure and legislatrve support wrll be expected as support from GoU.

The model further reveals that the operatronal contractual period of ten years.
phase will include g over I n from speeding Expected revenue of approximately USD 974 violations, tralfi.c fines and penalties, sale of digital registration plate fees u Operation expenses of approximately USD 106 rnclude system maintenance costs, wages and general admrnrstration budget, Heavy expenditure on capex and infrastructure cumulatively of approximately USD 540 million The capex key dnvers wrll be electronic devices, speed radars artd other related equrpment and lnfrastructure.
The return on investment over the ten years is at 38.99%, rmplying a 3.9Yo return per annum on a I basrs.

8.2.1.2 The utilisation of funds at source According to Article 9.5 of the violation of traffi.c laws, shall be made quarterly The Government of Uganda shall make such payrnent wrthin no more than two months from the date of , all payments, r.e., fines charged forg T issurng the invoice by the Contractor.
The fines envisaged by the Contractor flj YI stated rn the Frnancral Model are statutory fines provrded for under ald aI the Act.

These are from persons v|.olate I'aWS Urb regulatng traffic arrd road safety and therefore are supposed to be remrtted to the Consohdated Fund under Section 30 (l) of the Pubhc Frnance Management Act, 2015.
Sectron 30 (1) of the Public Finance Management Act states thus:- All reuenues or othet moneg raised or reeiued for the putpose of the Couernmen\ shall be patd mto and shallform part of the Consolidated Fund exept tte reuenue speafred m Sealon 29 (2)(b) dnd (3).

Obcenration.

The Commrttee observes that the monies collected from fines form part of the consolidated fund under NTR.

Parhement must appropnate tJrese funds per Article 154 of the Constrtutron of the Republic of Uganda.

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Rccommcndatloa.

Thc Connlttce, therefore, recoIntaen& that all flncc collectcd undcr the Agrccmcnt forn pert of the Consolldated Fuad and be approprlated by Parllaracat as tequlred by Law.

ffiF' 8.2 13 Tax Inenliues: The financial model mcentrves wrll aJlect the im duty on the inputs of the contract.

While assessing the model, the foreign investor's inputs will largely be imported raw materials such as tracking chips and cameras that are not locally manufactured.
The choice of a lO- year project penod for the private foreign company seems to tie in wrth the duration of tax incentrves.

It implies that the choice of l0 years was informed by the desrre of the private company to enjoy the statutory ten-year ta.r( incentive and esrt.

Therefore, the Committee's underlying assumpuon is that all computations of charges are based on making the company profi before the end of the tax incentlve regime.

After ten yea-rs, the Contractor wrll mport duty over the project penod.
exrt wlt]1out e g I re Rccommcn&tlons.

The Commlttcc rccomm.endl that the Plan lcter ln Charge of Flnance, xld Economlc Development ahould aot lssue a tax laccntlvc tu ycars to thc Coatractor rrhoae payback perlod ls tea@ 9A L2 g @ year..

The tar.

lncentlve .hould tle wlthln the frnt four ye hvestment, after whlch thc .tatutory tarer:hould apply.

aru of 8.2.
aru of 8.2.

1.4 Frnarctal Model specif.cations The model rs srlent on pubhc investment regarding land acqursrtion to stdl ITMS rnfrastructure and ad&tional traffic lights that may be necessaq/ to install sensors and actuators for easy tracking.

This is because some a-reas in the country do not have a single tralfic light, yet cnmmals may pass through such points.

N. Re commendatlone .


The modcl chould laclude thc t dttal Gio?cramcnt lnvectmcnt ln the acquldtloa of laad and other aaacts ncccaraty for the lapleacatatioa of the projcct.

E.3 Tor 3; To establish rrhcther a d€Eonltratlon ofthe elfectivenesr the projcct by inrtalllng the ITMS on governrncnt ve tnotorcycl€i, and pasaenger service ve roll out sac donc.
lu before ,ffi The Committee found that the PMT visited the MoWT/UNRA regional stations and Police command centres from February 2nd - 8th, 2022, to establish space requirements.

The team adopted a general report during the meeting on 18ft Feb 2022.

The Minister of Security informed th Committee that the Contractor had piloted the installation of the trac in different vehicles.
This exercise began on February 2nd 2022, and installed the trackers as follows: o,$/ A r n a rt a a 08 Cars (Privately own CS O4 buses each plying each regron O3 Taxis (Minibuses) O5 moto rcyg:les.

(Boda boda) 9L2 , UTL had provided 21 test sim cards to the servrce provider tion in the trackers.

All vehicles used during the rcise to 13 er.Q-S &-* 14\)r &" @Fc estabhsh space requrrements ln the regronal centres were installed with trackers to estabhsh UTL network coverage nationwide.
This was a work ln progress of UTL to identifu the network dark spots during the pilotrng phase.

-fttr Further, two traffic junctions were identified in KCCA for piloting at Makerere Hill Road and Fairway Hotel Yusuf Lule Road complex junction.

The Contractor supplied pilot Number Plate Recognition (NPR) and Surverllance cameras and linking them to the national command and data center at UPDF headquarters to analyse vehicle, driver and human behaviours at different junctions.
Makerere Hill was installed with eight canneras, mainly for traffic violatron analytics and survailance.

Others were piloted on the Northem bypass for vehicle identification and traffic violation analytics.

A facial recognition and traffic density camera been placed in Kisekka Market for analytics.

j. I N I ,tr, Obsen atioa.


=r- The Committee observes that Gp,"JQ"ft in phases starting with the The system will be im em capital crty and rolled out across the country over a three-year 11 lll ,v 1"- "'": :xffiT&- h:::i;[]:.

:','ffi" The service provrder, in conjunction wrth GoU, will operate the system over the ten-year period, which upon expiry, the pro.1 ect will be handed over to the government at no additronal cost.
Piloting the ITMS will help build confidence in the project by demonstrating how it will create a centralised transport monitoring system for all motor vehicles and motorcycles in Uganda.

Based on the tracking device installed on all motor hicles and motorcycles synchronised with the digital number tes enhanced with securigr features as suitable mechanisms, p entiffing criminal elements i public will be simplifiedH 14 9;ta B$ lv.
By the time of drafting thrs report, the Committee had not < ->^- recerved a report on the pLlot study from the Mrnrstry.

Reconrnendatlons.

The Conmittee, thereforc, recoEmende that the Miaistry of Works and Miaistry of Security implement thc ITMS project bascd on the llndlngs and rccornmcndatlons of the pilot rtudy report.

8.4 Tor 4; To establieh trhether Goverarnent urould meet ell coets required for inrtalling thc ITMS ia ell vehiclea.

8.4.1 The proposed.
8.4.1 The proposed.

Fees to be charged on tle new digital registration plate.

6r@ m*, ffi The Minister of Works and Transport informed the Committee that the current number plate is an aluminium plate embossed with characters without embedded sensors.

This makes it susceptible to duplication, manrpulation and hard to rack since they dont have a mechanism to detect tampering or unauthonsed removal of number plates.
As such, in the process of the Ministry of Works and Transport was replacing the current number plates.

G The model assumes charges for using the number plates as one such source of revenue for the investor to recover their investment in 10 years.

The Committee noted that the amounts proposed to be levied on acquiring the new digital registration plate would be incurred by the & already registered and new car own .
Table 2 shows the c in the financial el- Table 2: charges oftracker and number plates in thc approued ITMS projed financial model Sn I{ame 1 2 r- I Tracker + Number plates Payment for OD Set for *"\Sn'* Veluc (usDl 150 200 =\}il Conntsf Cost for Onboard Device (OD) Payment for the tracker devrce + NP tag for first trme reglstration \N tu 3 te <- @Fn Payment for the tracker device + NP tag for replacement on already registered vehrcles Payment for the tracker devrce + NP tag Payment for number plate replacement because of damage or loss (addrtronal fee) -ffi 3 4 5 Palrment for OD Set, owned Car Payment for OD Set, owned motorcycle License replacement/ marntained plate 42 t4 2l Soure, the ITMS financial modeL Obscnrationr.
The Committee observes that; l. Reregistering motor vehicles and motorcycles with new numberplates and trackers is intended to facilitate synchronising the owner's detads wrth the new system.

This will impose a consrderable cost on already regrstered owners of motor vehrcles and motorcycles, glven the rnherent costs of acqurrrng new number plates and trackers.
However, the Committee notes that it is standa.rd practrce to incur a fee whrle replacrng or renewrng a document required by law, such as passports and driving permits, upon loss or exprry.

Therefore, the requirement to pay for the drgital registration plates would not be a new phenomenon.

However, the Commlttee deems it prudent to harmoruse tJle fees for Onboard Devrce-OD (to replace older rrumber plates/ with the TraIEc Road Safety Act and the regulatrons thereunder.
ll Foreign vehicles, vehicles m transit and those temporarily in U da not provided for rn the mPrl- Recommendatlonr.

The Commlttee, therefore, recommeadr that; t. For the purpo.e6 of cahanciag cccurity aad cunrcillancc, thc ilA propored feec to be charged for flrst tlmc rcgl.tratioa aad new L) digltal plate are .umcletrt to recover the cost of lnvectmeat ""Ef"l ,-.

thcrefore :hould be approved.

9kg ti.


The feec for the Onboard Dcvlce-OD (Tracker + Numbcr Platecf for already reglstered vehlcles and motor cycle: be harmoaleed wlth the Traflic and Road Safety Act and thc regula rta thereutrder.

I iii.

The modcl rhould be revlewed to ln thole tcmD inU 3 ltt translt and ,+\, (- No I 8.4.2 Tle proposed fires.
w The Commrttee established that the traffrc violation fines were one of the fundamental avenues for raisrng revenue for the Contractor to recoup the imtial capital mvestment.

The model proposes to rarse USD 390,034,848.45 from fures.

The proposed fines to be charged per offender are shown in the Table 3 below.

.-N.-, Tuble 3 hoposd fnes n thc ITMs prqect nnanaal Model Sn Flnc Anount UGX 1 2 3 Speed Violation Stop line/ markings T\rn not under the sign Red hght 4 *ur@, tfe ffMsfirunaal model.
250,000 ?o ooo 70,000 130,000 Further, the model does not demonstrate while maintaining the current levels of statutory fines.

The various scenarios should have been developed to identiff the most optlmal scenano for the benefit of all staleholders Multiple stakeholders have different objectives, i e., the private fi.rm aims to maximrse profit, the Government rs to improve securi levels, and the public is to obtain senaces at the payback ,"^) Obrcnratioar.
The Committee observes that the Tralfic and Road Safety Act 1998 under; a Section 119 creates zrn offence of careless or inconsrderate r vehucle use.

Section 108 (7) defrnes reckless dnving as drsregardmg the rul sof the road or dnving without proper caution.

[t includes drieing over the prescribed speed limit, failing to use srgnals, disobeying traffic srgns and signals, and drifting lnto another Lare.
Section 165 provrdes olfences that can be punished wi prosecution by paying a fixed penalty to discharge any habrhty arisrng from a written notrce issued by a police omcer to an offender.

Such offences are prescribed as fiunor offences and; /Sectron 165 (13), the Mimster may make Regulations to provide forq3 #s offences whrch will attract a fixed penalty not exceeding one tutory Instrument 34 of 2004, the jh"^b?

cur?ency points.
cur?ency points.

In L7 6i d 8.4.3 Tralfic and Road Safety (Express Penalty Scheme for Road Traffrc Offenders) Regulations, 2004, the Miruster developed a Schedule of mrnor offenders and punishments prescribed therern, Recommendatlone.

Thc Comnlttec rccorrr.rtrGndt that thc llnea propoied ln thc llnanclal rnodel be hannonlccd with thc prot l.lon!

of the Trafllc aad Road Safety (Brpress Peaalty Scheme for Road Tra(f,c Offeadersl Rcgul,atioa.,2OO4.
9 &6 Insuranesfees The financial model proposes to increase motor vehicle third-p by USD6 to raise USD 143,809,572.98 to subsidise the cost of number plates for boda-boda motorcycles.

Ob:errratloa.

The Commit tee serves that drlferent legal regimes provide insurance to cover insurable risks.
It is not an income available for disposal as the financral model provides, for rnstance, the purpose of a third-party insurance policy well covered under Section 3 of the Motor Vehicle Insurancc Ghird Party) Cap 214, which states that; ( ,- I or a poliq uthtch tnsures such a "the pohcy of msumne must persons or clrzsses o./persons as mag be specified in the poliq tn of habfutg tahich mag be tnanned bg lam or her or them n resped ol death of or bodtlg injury to another person eused bg or ansing out ol tle use of a vehrcle on the road; except that a policy n tem]6 of tl s Sedton shall not be requtred to @uer lubthtg m resped.
of the death of or bodtlg tryury to a person aising out ol and m the @u of thc perso\ by a person insured under the policy."

rse of c H )s v As provided in the Law, thrs purpose carrnot be substrtuted by the clause rn amendmg the Law usrng the backdoor, whrch rs rllegd and untenable.

zrny agreement to cover up the project's operations This will amount to &.

q 2 lttee construes insurance to be a cost that is willingly born by arr expected flnancral loss.
The rnsurance dual to protect or hedge against ( 18 lncrement rn the model does not meet thrs cnterron, as the proposal of subsrdrsrng tJ'.e cost of number plates for boda-boda motorcycles under the insurance increment of USD 6 cannot be treated as an unpredrctable contingency.

Reconmcndatloa.

Thc CoEmlttee, thcrefore, recommea& that thb propoml bc dropped.
N', 6& s- 8.5 Tor 5; To cerry out an exhauetive investigation into the existeace and operatione of MS/Joint Stock Cornpany Global Securlty._g 8.5.1 Whetlar Ms Joint Stock Compang Global Secuitg exists.

M/s Joint Stock Company (JSC) Global Security was registered in Moscow on July 24, 2013, with the primary number 1137746628623 issued in Moscow under the laws of Russra and with powers to open up foreign companies under her control.
As spelt out in Article 3.4 of the Artrcles of Associatron, one of its main objectives is to engage in holdin companies' operations and security commercial sector activities, others.

Therefore, the company is a legal entity with the power to in business with a foreign government or comp arno ( .

Jim Muhwezi, ormed the Commr The Minister of Security, that when M/s JSC Global Security approached GoU to do busin Memorandum of Understanding was signed as an instrument for negotiations at the time.
The contract executed between the Government of Uganda and M/s JSC Global Security on 23.d July 2021 under Artrcle 5.20 calls for registering a foreign or subsidrary company.

M/s JSC Global Secunty passed a resolution to open up a subsidia4r company in ganda called Virtus b Security Company.

Co regrs Os tee is aware t Sec e Companies Act provides ign companres in Uganda.
It states that "Section s 252 51 of lg to allforeqn compa being ies incorporated 19 {r qa & & ), l, outside Uganda uthich establish a plae o/ business in Uganda and companies tncorporated outside Uganda uhich haue established a place of business in Uganda and @ntinue to haue a place of business in Uganda".

g_ {K* Courts of law in Uganda have gutded on whether foreign companies muet register in Ugeada to do businesr.
In thc case of Krone Ugaada Ltnited v. Kerilee Investmente Limited l202ll UGConnCl6, Court held that ' Un der the la u, once a comlto; g ls lncotporated,, 7t obtatns legal personalltg as against thc utholc utorld.. Legal Drlundanies do not diminish the legal percond,lltg.

Llke na'tura.I cltizenship, it ls onlg restrlchd to ulrrrt tt can do outsidc lts geograph boundarles.
Tlvrefore, lt k tnte tlvt a comlra, g lacoryto thc Ulnltcd, Ringdom ca ttd sact baslaess ln Uganda ui haulng to go through ang form of t n Court further held that dMost I it lg, tltc clted protlslons do not sa:g, eltler etc,presslg or bg necessary bryillcation, that elary comlta;ng tlvt utislte,s to fra;nsaat la Uganda must undcrtakc thc sald, reglstratlon; all lt sags ts, U'tlrc complrlng ufsftes to establlsh a place oJ bttslness, then 7t must rcglstcn As suctg non- under tlrc said ptotislons does not dlsetrytouer a dulg lnco compang ttom ttansacting Dus{ness ln Uganda and.
trom brtngtng or malntaining a court actlon ln Ugandd.

@ It rs, therefore, clear that for any forelgn company to do busrness in Uganda, there is no requirement for it first to register; however, if such a company is desirous of having a place of business in Uganda, then it will !

have to register the Companies Act,2012.


Where the Law calls for establishing a place of work in Uganda, the company must deliver to the regrster \M a) b) fied copy of the memorandum and ES of association of e lrectors and company tAry @h c) The name and postal address of one or more person resident in Uganda authorised to act on behalf of the company.

d) Full address of the registered principal office.
1>Z The Attorney General informed the Committee that M/s JSC Global Security Ltd registered a subsidiary called M/s Virtus Global Securrty Company Ltd on 2 1( December 202 1, udth M/s Joint Stock holding 99% of shares in the company and 1olo owned by Shkarban Ivan, a Russian National.

Further, M/s JSC Global Secunty Ltd registered itself as a foreign company on 2ls March 2023 (Appendix 2).

Obsenratlon.
Obsenratlon.

ffi The Committee observes that Virtus Global Security Company Limited is registered in Uganda, with M/s Joint Stock Company Global Sec being the majority shareholder as a subsidiary co pany that can act on behalf of M/s JSC Global Security.

rhfol "k 8 5 2 Wlethcr M/ s Joint Stock Compang Global Seatitg is undergoing Bankruptq procedures.
It is alleged that on Septe 17 ,2O2O, the Moscow Arbitration Co received an application from Rus-Prom-Technolory on the recognition as insolvent (bankrupt) of JSC Global Security with the followin g claims that; a) Stok-Trading LLC sued M/s JSC Glob Security for a bt of 1.2 mrllion rubles which is about USD16,260, b) Tuesday GS sro Slovak Republic sued M/s JSC Glo company for a debt of 6.
1 million rubtes (USD82,655), A-- Security c) JSC ZVI sued M/s JSC Global Security for a debt of 23 million rubles (about USD300,000) then a debt of 1O mrllion rubles (about USD135,500) and 4.6 million rubles (about USD62,330).

Liabrlity Partnership "Orken Alems" sued M/s JSC for a debt of 8.5 mrllion rubles about USD ) Limi Glo ty ( E tu 2l a__1 115, 175) and Gu Main Department of the Pension Fund of the Russian Federation for failure to pay 10,000 rubles (about USD135) and 455,00 rubles (about USD60O).
e) JSC Royal Silk Factory sued M/s JSC Global Security for a debt of 19.9 million rubles (USD270,000) A11 the petitrons were filed between 2019 and July 2O2L.
The Committee was informed that on 22.d November 2021, tlrre Arbitration Court of Moscow under case No A4O-178427 l20-24-2988 received the motion for renunciation of the claim for bankruptcy fiLed by the debtor Rus- Prom-Technologr and court noted that it was not in possession of any information about any statements of other credito s regarding the bankruptcy of M/s JSC Global Security Co at the hearing and determining the case.

( ffi,' .--., ___F_ Obsenratlon.


'J The Conmlttee lc convlnced that there are !o pendlng bankruptcy pctitions against M/s Joint Stock Company Global Security Company to hinder the Company froa contracting with the Governmcnt of Uganda.

thereto.

8.6 Any ma 8.6.1 Wlather Gouernment amplied u.tth all the Proa)rement pro@s enuisaged n tle Proanrement of Przblic Assets and.
Disposal of Pu Assets Act and the Public Priuate Partnership Act; The Commrttee established that JSC Global Security was singly sourced, and its procurement was not through competitive bidding as required by Law.

According to the Minister for Securit5r, Hon.

Jim Muhwezi, the Joint Stock Company Global Security was the most successful among six 9La panies identified to offer the best solution.

These included; B. v (JKG) lobal Secunt5r / |s.q 22 Aj" Itl.

iv.

v. vi.
iv.

v. vi.

UTSCH/GM Tumpeco/Arnold & Brooklyn Co. Ltd Kommlabs Para-Tech Group LMS Telecom Ltd The Ministry of Security argued that this contract was of a specialized and securrty nature.

As such, Government preferred to use the direct procurement method provided under Section 33 of the Public-Private Partnerships Act.
It rs noteworthy that Section 3 of the Private Public Partnership Act 2015 is to the effect that; 'In the nvlementaton of a pubhc-pnuate paftrErshtp, the @ntrud shall be gouemcd bg the pnnaple, ama ng others, ofttansparencg bg et]fl/,ing that the proctrement of a pubhc pnuate parTnersltip does not rest,l.(,.
co|,I'pef,tdon among btdders a^d that t is conduded on eEtal oblecaue cntena, and f,N Section (1) (2) (3) 33 of the Public-Private Partnershrps Act states that; Dtrect proanrenanfs rs a sole source proa)renlent metad used ulere tte aralmstances do not allou the use ol @mpetition The dved proafienent sl,a,[ he used to acheue elfaent and.

fimelg proarenlent where aranmstances do not d.Uotl the u.se of @,,.'pe,;rt,on.
TIE prcarement of d pnuate pattA under the dved proc,arenati nathbd shall be approued bg the Cabtnet in aeordance uith the regulafions mad.e Ad t The Committee established that Cabinet, under Minute Extract 129( 2O2Ll of Sft July 2021, approved the implementation of ITMS and authorised the signing of the Agreement between Uganda and M/s Joint Stock Company Global Security.
Further, there was no sohcitatlon of bidding, meaning there was no request by the Government for Bids for the provision of Goods or Services through a request for a proposal, quotation or tender.

w l Section 3 of the Public Procurement and Drsposal of Public Assets Act O13 defines icita doanments" as bidding or any vrting bidd J rticipate in t or disposal pro other documents It tu 1 23 includes documents invrting potentral bidders to pre-quah$ and submit bidding documents.

Obeerrration.
Obeerrration.

The Committee observes that; g- ri I ll There were no solicitation documents since the Government used unsolicited proposals as provided for under Section 34 of the Public- Private Partnerships Act.

Having ascertained the restrictive securiqr nature of the transaction of the ITMS, the Ministry ought to have first developed the solicitation documents, clearly spelling out w they wanted.

Then the Conftactor would develop interest, i rn taking up the project with clear expectations.
lll Contracting an unsolicited service provider for the ITMS prol limits the GoU to develop the feasibility study and procurement documentation.

Subsequently, competition for the tender during procurement ranging from directly negotiating the contract organising competitive tender with no explicit advantage for unsolicrted service provider, is eliminated and, in this case, M/s .s(i JSC Global Security.

Rcconmen&tion.
Rcconmen&tion.

The Comnittee, therefore, recoi nend6 that the governnent contracts senrlcc provldcrs in accordancc sith the Law.

p( 8.6.2 Urstable ne stg cauers I lt The Committee noted that whereas it was a Cabinet directive for the to be hosted on the UTL nehrrork, the UTL network signal coverage does not sufficrently reach the whole Country.

UTL uses a 2G capacity, whrch might be weak, yet the most modern network is at 5G capacity.
The mmittee was rnformed that UTL is obtainrng a hcense to roam on the nhance their coverage as a temporal measure as they MTN ne rk to lmprov etwork coverage across e country.

Q, 14 !

&?

t g- Obsenratioas.

The Committee observes that without assurance of network srgrral coverage, relyrng on a thlrd party to the contract to provide an essential service will likely expose the data collected to security risks and also jeopardise the proJect's success.

Recommen&tione.
Recommen&tione.

The Cotntrittcc, thcrefore, recommen& that UTL e:rpedi upgradtng its network coverage through the countty concurrently slth the prdect roll pharcr.

9 CONCLUSION (Ll' + Implementing the Intelligent Transport Monrtoring System aims to enhance crime management through detecting, identi$ring and recognising all vehicles and motorrycles operating in the country, afiron other benefits.
It is an intelligent safe city system based on software w stores information about vehicles and owners, analyses traffrc through special equipment, checks vehicles' legi and more.

ow Based on our analysis, the system wrll signilican y improve the vehicle database, streamline the transport sector, enhance the CCTV system, and improve road safety and securi[r 1n e country.
nt and the financial model The Committee posits that the gaps identified and need to be dealt with urgently, considenng that the project is being implemented.

Therefore, the Committee calls Parliament to compel the government to review t]re Agreement and t]ie financial model in light of the recommenda ed rn this report.

ot+.

5 25 Llst ofAppcndices.

1 .

The Frnancial Model for the Intelligent Transport Management System (rTMS) 2.

Certifi.cates of regisration of Virtus and JSC Global Security in Uganda.
tr, 3 =--=L 224ry !

xr 26 Il aa COMUITTEE MEMBERAIIIP- 1lTH PARLIAI,IEI{T, 2ND SESaIOI{ COMMTTTEE Olr PHYSICAL NTFRAsTRUCTURT COMIIITTEE OIT DEFEITCE AITD IITTERIIAL Sn 1 Hon Karubanga David C/P AIGI{ATT'RE SA ITAME AFFAIRS I{AME SIGIIATT'RE ( 1 t2 13 t4 1S 16 t7 Krbedi ?

I 9 n 2 Hon Kasolo Robert D/CP 3 Hon.

Sarah Opendr 4 Hon Nsegumrre Muhamad 5 Hon.

Lalarang Hrllary 5 Hon Asaba Paul Nsabrmala Hon.

Bukenya Michael lga Hon ByanFma Nathan Hon.

Agaba Aisa" Hon.

Pascal Mbabazr Hon.

Atyang Stella Hon.


Kabanda Davrd Hon.

Namujju Cissy Hon.

Alvas Sylivia Vicky Hon.

Ssemwanga Gyaviira Hon.

Naigaga Manam Hon.

Atwakiire Cathenne Ndamira Hon.

I(abuusu Moses Hon.

Sebamala Rrchard Hon.

Okello Nelson Hon.

Saazi Godfrey Hon.

Nambeshe John Baptrst Hon.

Ssekabra Denis Hon.

Balmwezo Ronald Nsubuga Hon.

Okupa Elijah Hon.

Mugema Peter Hon.

Roland Ndyomugrenyr Hon.

NsanJa Patnck Hon.

Kaberuka James Ruugt Hon.

Nsrbambi Yusuf Hon.


R*'emulikya lbanda Hon Krbalya Henry Maurice Hon.

Bamababo Charity Hon.

Alobo Joan Acom Hon, Thembo Gideon Mujungu Hon.

Emmanuel Omodrng 18 l9 20 2t 22 23 24 ai 26 2?

2A 29 30 31 32 33 34 3S 36 il !IE] k €\^^&^=) 2 3 t2 13 t4 15 Hon.

Nyakikongoro Rosemary Chairperson Hon.

Mrlton Muwuma Vrce Chairperson Hon.

Wakooh Godfrey Hon Ochero Jimbricky 5 Hon.

Niyonsaba Alex 6 Hon.

Opolot Simon Peter Hon.

Hon Hon.

Hon.

Hon.

Hon Hon.


Hon Hon Hon Hon.

Aeku Patrick Nakwang Christine Tubo Okeyoh Peter Byamukama Nulu Joseph Mugabe Donozio Kahonda Kauma Sauda Kintu Alex Brandon Kyoto Ibrahim Lubega Bashrr lakii Peter Abrahams Mwesigra Robert Rukaari Hon.

Hon.

Hon.

Hon.

Hon.

lkolo John Bosco Ssehkuubo Theodore Namanya Naboth Okot Moses Junior Bitek Lt. Gen. Elwelu Peter 16 t7 -(r 18 19 20 2l 22 23 Hon.

Odur Jonathan 24 Hon.

K^tib^aA Francis Katongole 25 26 27 2a 29 30 31 Hon.
Wakayima Musoke Nsereko Hon.

Kiwanuka Abdallah Hon.

Bakireke Nambooze Betty Hon.

Museveni W liam Hon.

Kangrragle Stephen Rwakanuma Hon Arinaitwe Rauben Hon.

la.mwaka Mar8aret w A +.

tlP & w,,-,( ql- 27 /.


qva',[X. I SUMMARY OF THE FINANCIAT MODEL FOR THE INTEILIGENT TRANSPORT MON]TORING SYSIEM (ITMSI preaGh?r:aauacrrfr rinanciai r,loaer ioiirl" l.i"rris"?,irr.nsport uon,toring synem (ITMS)' l(ey Fanancial Elements of the Proicct a su-mhari,-or ttrri reilsdfurldni ind outcomes of the t. Total investment rs estima-te<, Ii u-so zsz.orl milion, funded wholly by private <uity.

2.
2.

Ihe proposed infraskucture will argumen( support existing Police surueillance infrastructure whae avallabh, howarer, new calibration will be requked to syndtronize the equiprnent at the cost of the contractor' e.g Cameras.

3. ltle main sources of rarenue ftom the investment are traffic violation fines; 4. the tl o key main drivers of the investment costs are car trackers and rmv number plates for cars and motorcycles, 5.
No investment co6ts or operational costs would be boroe by GOU, and there are no Gov€.nment guarantee requirements.

6.

It is ooected that, Global Secu.ity (GS), being a foreign (anpany, will establi$ an investment company or an affiliate of the mother company in Uganda and would thereafter benefit from tax incentives as grovided in the Investment Code Otherwise applicable tax laws would apply.

7.
7.

There is need to build a buffer in the rarenue smams to address risl6 rehted to unexpected revenue $ortfall from 6nes.

It is therefore poposed to inoease motor third party insurance, *atubry viotation fines, and vehide owneGhip transfer fees to acoJrnulate the requked buffer.

8.

The retum on investment (ROI) is calculated at 3g.99go over a lo-year ctrflod,.

9.

Ihe projected Net Profit Margin (Net Income Ratio) b 15.6rgo over the prorect perlod.
to.The revenue to GOU over the t0-year period is projected at USD 247.09 million.

Conclusion l' Based on the attached assumptions underrying the Enanciar Ntoder, the invedrnent would be viable.

2.

The proiected cadt at hand would be very hw in the years 3-Z of project irnphmentatlon and thereforo thc need for buildinq into the poect a re{enue buffer in case of any mateflal adverse mpact- oQ4le-revenue stfeams.

(.._ w l,.r0e I of 9 ,{ \r*\Cl !d- I + f j*A,Af'- 3. on the consumer side, an "ffgi:.
:"#[ii5X'H;tfiffirl#1f necessary to address the pol Section D of the attachment' Wav foaward iil hilii,ii n.aa, includlns its assumpdons Manaoement Team OMo in the meeting nerJ Secre[ariat, Omce of fte PresEent' Approval of the Rnancial Model makes frMS effective.

'xTli!i#"31,iaffi' the Agreement beh/veen GS a od@U on -'" @!

ta P.r11t 2 rtf9 t DETAITID REPORTON RESUTTS OF THE FINANCIAT MOOELFORTHE INTEUIGENTTRANSPORT MONTTORING SYSTEM (lrMsl A.I(EY ASSU MPTIONS OF THE FIT{ANCIAT MODEI.
+ T.ac*er I'lumbrr Upgnde of Cammand centers t€s Ocs doatmantation €PS G:dgets for cnforccment c06t vehidc ProJect RBourcas (Velrkles & tield Ca mcaa slstcm: rgoundaiyr oumbcr CamGa System : 'latersection.

Senso.

bridger Workhop 8 gate Workshop 10 tate Softwerc Fines violatioa Finc - Flna - line fine - tum not unda?

the Finc - rad Selvices Paym.nt ,or OO set, aaw vehicle ent ,or OD rat, owaed car P P.ym.nt fo.

OO set.

owned moto losuraace in<tenrent kcenJe plate .eplac.rncot / .naintained Orivc?
's licenre (at time oa ,enelvzll tEtcq l s3SO,oo0 s s3380 Commcnt cost ,or Onboa.d 0€ Hardware and softwa.e mergiag with ertsting lrdudes Pa&wech Gro3si !olution OD ol local corn Grd8ptt lo.nabl€ police enforccment of al 800 2l Flxl for GS t€.m ce6 + insurance vehldeJ and €quipmGnt fot fi€ld wo.k 545,(tr0 camcra compler installed on hiShw.ys to and other violrtionr.
s105,000 multlple ca.nel, unitJ + violrdoo registration installcd on 1 intc,!.ction s40,@0 V.hicle id.ntiltcation system inn.lled on l5 s s50,(m nt Nurnbar CoGtruction and equip.nant ansallation man t .

s3s0,(m Cofln uction ard €quipment aattallation s25,@,m0 GS softwere cn la Sou?ce tac 10 for {IMS rnarugem.ot (OB.

CMt I zsopooucx Price chan8e due to CIPEX optimir.tion 5200 S42 514 S6 t2r s4,2 Paymcnt fo, the T.acke.
dGvice + Np tag for the Trac*er device +NPta Payrncnt for thc T.acker devlca + Np tng To subsidhe the cost of nunte.

platcs ,or Soda bodas nloto Paymenl forl{umber plate replace.rcn t II ra PrBc 3 o, 9 w // 1,<p'r !l' q) lue.lra Nom ber of veh rdes Growth .ate Shari of from fines GS Police N MT N umbe a of compleres 8o s€n tor undarie!
tn + terections + Valuc 1,800,0(n 120,@0 8oo, LS% E-l ttol rterad t5ca and ,nol o rcycles reSl Gommant of Nurnba, oda nda 2020 Uin boda.b Annual trowth rate on e'a6 a ln To allow the Privete eq recoup the investment over a tGyear Parlod.

nd motoroldes uity lnv€sto.

aod operallotial cotts to Total amount of ComPler6 8.

Other Macroeconomic Assum s, Nlmc Vlluc JE oascouol rate, annual Discount ate, quater Anonizatioo of t.acke's, numberof Amorti2ation of camc6s, detkeatet, etc.
lnnation Rate.

aanual ayerage ?l Rate of income growth Traflic violatioa rate MolalionJ by car UGVUSo rate 10 EUR/USo rate 3.fiX o.7sx 5 l0 5.M6 t.7S% 0,0071 4.1E7 !,s71.13 sr.losooo Rcmorls USO discountln6 annual USD dlsGosntin& qurtt.r ' Minlmum lihtime ortraffmitter lnside the Nu,abea pl.tes ' Mlnimum lifatl na of Gmea complexes uaits .

(came.as and radarsl .

l Malntaiaed the maximum tar8et Policy rrte ForwaSe indexation Scale cocfficient for vtolatlon model Arrcage aonual amount o,,ines perca?
&cha.r$ Rat.

bas€d on prevailiog rate at the time of fn.ll thc model.

Exchan3e Rate bas€d on pr.vailing .atG at the tlmc of lin lhe model.

3 w F Paee { of9 't,iqful*iirt,i ,- c. ouTPUTs oF FtNANctAtMoDEt Table t Breakdown of lnvestments CAPEX OPEX Total $ 234.909,916.05 $ 22.723,906.88 $ 257,033,822.93 Table 2: Shareholde.s net ancome t?om flnes, lnsurance.
and other services mlnus GS costs Shareholder Govemrnent of _ Uganda JSC GS NEC lncome $73,209,78A $700,274,404 $24.4 03,293 6rl S w .re P.rrl.. 5 ol9 Table 3: GS net inoome brce Oescrlption ) I ( n Ca nle taoc tap n laIt nme ts nve ts Revenue GS Re\Enue from tines Re\renue ,aom servioes qy'w Payment for set of OO new v€tlicle o/w Payment for set of O0.
rcplaoemeqlt for a car o/w Payment fot set ot OD, replacement for a motorclde o/w Numbe, pbte replacement/ruintain@ o/w lncrement of in$rance fees o/w Dri!/e6 lioense (at time of renelall.

Re!€nue butrct Erpenses OPEX CAPEX axes Payroll tares RU Payoll taxes UG Corporate tar GS Net Income ) dof,eP?ae0IafOve -Y tlia oDsu( 9322I o33 752 5448834o9I8 66t.20 4 2.5 390 L22I37Lo 486 7143I735 232 L.372I77452 3,3 t4 486 237 38t, 566.
38 46, 8I2.75 43 809 23,078,239.85 22,565,254.58 6L9,299,323.76 79,L37,497.66 7 - 540,,L61,,832.LO Ll9,s2L,L2o.3o 5,6214.195.08 2L,O46.424-44 152,830.500.78 100,214,404.39 Tabb4: Goamment lncomeftom flnes and tarcs RiIElZilrMIli@ G@I@ Fines Pawolllaxes Corporate taxes Total { {, Prgo 6 of9 ivEl[E $73,209.789 $21.046.424 $152.830,501 $247.096.
?r:l w Table 5: Total Net Income and Revenue Shares Totat Net lncome and Revenue Shares 24,403, 742$ 60226 $ 100 274,404.39 o3 s37 Table 6: Cash at Hand forthe L$yeatpdod f-rrrrrrl rs" -g ,:, '-"^ 1r- ,ac cdr GoU NEC GS Total ,tt' 3 rn oJo cr] 1,.;o U\i...-IO 320 0fr- r..r, 3 :to o.ra.

((i, I lo, m CtE I !r.r o.ti OOJ I .

'f c Table 7: linanobl lndlcatorc Total ,nvestments a b) Return on lnvestment ROr c Net lncome Ratio (Net Profit Ma nf s2szo33.822.93 38.990A 15.61% o. TMPUCATTONS a.
Consumer The consurners will be rcquired to pay higher costs for the new numbc.

plates with tracker3.

For new rrchicles, this cost will be casily abso ibod in the cost of new cars.

owtl e pricc incrcase will .rffect m.-r wo w > payfhe same cost as cunently, but will be atfected by the increase in insurance.of 56.

These costs wiil;;;ri;;"';;;i.p.

"*i""ii, r ecutity tor iodtttiduals and the country as a whole.

b.
b.

Investor The investment will be financed wholly by private equity of 5257,033,822.93' Assuming the asumptions hol( the investor will receive a retum on investrnent of 3-996, and will be able to recoup the anvestment costs in the 2'd Quafter ol year 10 (2Q10Y1.

The net profit margin is projected at 15.6%.

Since the main sources of revenue are fin6, the success of the project will dep€nd on enforcement.
This is also one of the main rlsk for the proiecq there is no fallback position in case revenues from fines are not reallted.

Aaother rlrk relates to timeliness ln transfer of collected revenue to the contEctoe Such detays may cause 'significant castr-flow oonstrainb leading to difficulties in project implementation.

The investor will have very limited cash at hand in year 3-?, meaning any negative impact on the'income sireams of the ,nvestment can potentially crippled its srnooth running.
c Political Economy The issue of aftordability in relation to the seMtes rendered will have to be explained carefully by the Govemment especially for the costs related to the replacement of e;isting number plates.

E. RECOMME[TIoAnONS The PMT should review and approve the assumptions underlylng the Financial Model.
Govern.nent needs to prepare and i.nmediately implement an effective communication st ategy to explain to the public the Justiflcation for the proiect is proposing changes to the Statute for Motor Vehicle The Financial Mod€l lines which will require approla-.|.

Explo.e the possibility of increasing proportionately the fines.

for traffic offences to provide buffer in case th!

reveaue of fines is not adequate in a particular year.
The PMT lo work with Police to determine catibration of e,(isting cameras and othel relevaot ptoicct can 'w existing infrastructure.

Pa6o8ore ql Ir rv ,/ > a \ vt vii.

viii.

The project assumes tax excmptions for imported items.

The applicable taxation regime needr to be ascertained.

Explore the possibility of increasing of vehicle ownership transfcr fees to constitutes additional buf(er to revenue from fines The detailed Financial Model will be domiciled in the president,s Office and.
the link will be provided for future references during project rmplementation.

_10 ovcr.the years period of the project the Net lncome Rario (profit marginf shall be between 15-16%.

The necessary adjust.nenrs will be made.during project implementation (if necessary) to ensr.e the lnvestor Sets the agreed net income.

By append Model.
By append Model.

lng my signature to this repoft, I confirm the approval of the Financial .Nt)S Secreta ry Office of The preside *^"Wi, inlstry of Work and Transport ailperson, Prolhct Managemeot T€am (pMO Representative, Manistry of Finance, p nning and Economic lopment Chiot Executive Officer, Jornt Stock Cornpany 6lob.rl Security lVtlt S-titt4ttslll Witncss Joiilt Stoc& Company Global Sccuri '[a*,lo f'(ail,'.

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a NOTICE OF BENBFICTAL OVI{ENE ?ASTTCI'I,ARS* Nrnc of comprny'.....sl0tN.I.sIoC/K...cotr.?.

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IART I.:DEXAIIS OFIITIBIETEGTSItsR IS IET T]tc rt...ffi of bcrr6cid o*tctr of g....Glcncnt..Hill,.
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CtlEMt ( OFY 1 NAfl,NE OF BBNEFICTAL OVNENSHIP OR @NTROL ilnaN of 69nCr Sigpd ffi*'""'*^*oFcoMP^NrEs